Health Systems Find Unique Ways to Cope with Rising Labor Costs

Danielle Dyer and Vamshi Gunukula in Modern Healthcare

In a recent survey of 101 chief financial officers and other operations executives by the consulting firm Guidehouse, 43% of respondents said their nursing shortages are worse or somewhat worse, while 35% said the same of both physician and mental health provider shortages. The U.S. Bureau of Labor Statistics predicted nursing will see the highest number of new jobs through 2024 of any position: 439,300.

It's a problem that's not going to let up any time soon, so Guidehouse's authors recommend health systems dedicate their efforts toward productivity improvement and workflow redesign. Indeed, executives who responded to Guidehouse's survey said that's where they plan to focus their energies over the next 12 months.

The term productivity improvement tends to get a bad rap because people assume it means squeezing more work out of the same number of employees, said Danielle Dyer, a managing director at Guidehouse and leader of its workforce innovation practice. On the contrary, it is about matching staffing to demand, including understanding historical volume trends and cushioning with the correct number of staff to meet those levels.

Health systems should also leverage available technology to help with tasks like creating centralized staffing pools within one site or across multiple sites to reduce reliance on premium pay, Dyer said.

When examining staffing needs, there's a tendency to focus only on clinical areas like nursing or labs, but support areas like transportation or environmental services are equally important. If not staffed appropriately, health systems can end up with nurses performing tasks like transporting patients, rather than working at the top of their licenses, Dyer said.

“Pick an area: There are both process- and technology-enabled workflow enhancements that really can be used,” she said.

There are also technological solutions that give hospitals a better understanding of the ebbs and flows of labor demand. But any time a health system adopts such a tool, it needs to provide adequate training and assess whether it's being used.

Leadership needs to ensure “that whatever the tool happens to be, it's being fully utilized,” Dyer said.

Through all this, systems should make sure they're giving front-line staff and managers the tools they need to flex, or temporarily adjust staffing levels in response to changes in demand, said Vamshi Gunukula, a director in Guidehouse's healthcare practice.

The concept of flex hours, while second nature for nurses, is relatively new for support services. But Gunukula said it's important that they, too, are able to make staff changes based on the fluctuations in patient loads — to ensure there are enough clean rooms, for example. 

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